October 1996 | Volume 47, Issue 6
How Peter Cooper managed to make himself deeply rich and deeply beloved at the same time
It’s a story that has been told many times. The Hewlett-Packard Company was founded by two gifted tinkerers, David Packard and William Hewlett, in a garage in PaIo Alto, California, in 1938, with $538 in capital. Its first product was an audio oscillator for testing sound equipment. Walt Disney quickly ordered eight of the devices to help in the production of Fantasia , and the company never looked back.
While Hewlett concentrated on the product side of the business, Packard headed the business side and ran a notably tight ship. (In 1961, when the company went public, several high executives, who were staying at a midtown hotel in New York, had to make their way to Wall Street for the ceremony via subway instead of a taxi, let alone a limousine. Unfortunately for them, the New York subway is distinctly stranger-unfriendly, and they got lost switching trains at Times Square.) But despite the occasional misplaced executive, Packard’s methods were very successful. Today Hewlett-Packard is a thirty-one-billiondollar-a-year company employing thousands and doing its part to assure that the United States will maintain its lead in the dominant technology of the twenty-first century.
But if Packard was frugal about spending money, he was fabulously generous about giving it away. When he died this spring, at the age of eightythree, he left the bulk of his fortune to the foundation that he and his wife had established and already endowed with more than a billion dollars. Thus the David and Lucile Packard Foundation enters the ranks of the great American eleemosynary institutions created in the twentieth century, along with the Carnegie Endowment and the Ford and Rockefeller foundations.
But the men who founded these mighty institutions were hardly the first to use their wealth to help their fellow humans. Most of the great museums of New York, Boston, Philadelphia, Chicago, and elsewhere, after all, were built and filled with the donations of the very rich. One of the earliest of these national benefactors was a man now largely forgotten, except by New Yorkers, who see his name often around the great city. That name is Peter Cooper.
Like Packard, Cooper was a born tinkerer, frugal when spending money, and liberal when giving it away. Like Packard, he used these attributes to make and then distribute one of the great American fortunes.
Cooper was born in 1791 in New York City, the fifth child of nine in the family. His father, who had served as a lieutenant in the Continental Army, had a series of businesses, working as a hatter, a brewer, a storekeeper, and a brickmaker. He was not very successful in any of them, but his son helped him from a very young age and so grew up deeply familiar with smallscale industrial processes as well as the details of business keeping. In addition, he helped his mother around the house, including with the laundry. He soon invented a device for pounding the dirty clothes, perhaps the world’s first washing machine.
Unfortunately, unlike David Packard, who received a world-class education in engineering at Stanford University, his family’s relative poverty did not allow Cooper to get more than about a year of formal schooling. But that was not uncommon at the turn of the nineteenth century, and engineering was a much simpler business then as well. When he was seventeen, he was apprenticed to a carriage maker in New York City. During his apprenticeship he spent much time teaching himself by reading, and he even paid for private tutors in the evening. This gave him the idea of evening classes to let working people gain a formal education. It was an idea that would blossom fifty years later into Cooper’s greatest legacy, and it is now so common that it is hard to believe somebody had to think of it in the first place.
His apprenticeship agreement called for him to be paid twenty-five dollars a year and given a room rent-free, but he was soon so useful that his employer voluntarily doubled and then tripled his pay. At the end of Cooper’s apprenticeship at age twenty-one, the carriage maker offered to lend him the money he needed to set himself up in the carriage-making business, but Cooper declined. He didn’t want to be in debt, for he had already learned to be very cautious about money. “I used to pay all my debts every Saturday night,” he remembered as an old man, “and I knew that what I had left was my own!”
Cooper went to work in a woolen factory, again made himself indispensable, and was soon being paid at the rate of $1.50 a day, then very good wages.
When he was twenty-two, Cooper married Sarah Bedell. It was to be a happy union, one that lasted fifty-six years and produced six children, although only two lived to adulthood. But Cooper felt himself to be drifting. Late in life he said that he spent the first thirty years of his life getting a start, the next thirty making a fortune, and the last thirty doing good with that fortune. Thus he dated the start of his great success to the year he acquired a glue factory. He got it at a discount because he paid two thousand dollars in cash. So, actually, he had already acquired far more capital than the average man of his day.
Glue was not a very glamorous business, but Cooper suspected it would be a very profitable one. He was right. The factoTy was located at a place that was then deep in the countryside but that is today Thirty-second Street and Park Avenue. Cooper immediately threw himself into both running the business and improving his product line. At the time, American-manufactured glue was of very poor quality, and most glue was imported from Europe at high prices.
Cooper quickly proved himself as adept a chemist as he was an engineer. The very first year he cleared ten thousand dollars in the glue business, five times what he had paid for the entire concern. Soon he had a nearmonopoly on glue in this country and was earning upward of a hundred thousand dollars a year, a vast income for the 182Os. He continued to live simply, though, and to plow his profits into other investments, including, in 1828, a three-thousand-acre parcel in Baltimore, where he and two partners built the Canton Iron Works.
They hoped that the new Baltimore & Ohio Railroad, whose tracks ran nearby, would be a source of much business as well as a cheap means of transporting supplies and products. But the nascent B&O was near bankruptcy. Its few miles of tracks were so twisty that George Stephenson- who had built the Manchester & Liverpool, the world’s first commercially successful railroad—declared that steam locomotives could not operate successfully on it. Cooper decided to prove the great engineer wrong. “I’ll knock an engine together in six weeks,” he declared, “that will pull carriages ten miles an hour.”
This he proceeded to do. He found some old wheels that would serve, rigged them to a platform, sent to New York for a rotary steam engine he had had built for an earlier experiment, bolted it to the platform, and then added a boiler. Piece by improvised piece, he assembled the Tom Thumb , the first locomotive built in America.
To everyone’s surprise (except, I suspect, Peter Cooper’s), the thing worked, pulling a carriage loaded with fortytwo people at speeds of up to eighteen miles an hour, then a breathtaking pace. Indeed, some of the passengers made a point of taking out paper and pencil and writing down coherent sentences while whizzing along to disprove the belief that the human brain could not function when a person was moving so fast.
Soon the Baltimore & Ohio Railroad was a going concern (literally), and the value of Cooper’s land in Baltimore soared. When he sold out a few years later, he took B&O stock in payment at a value of $44 a share. A few years later he sold it for $235 a share.
The Cooper industrial empire expanded rapidly after this, and within two decades he owned foundries, wiremaking plants, blast furnaces, and a rolling mill. By the 185Os twenty-five hundred men worked for Peter Cooper, no small number when you consider that there would not be a single industrial enterprise listed on the New York Stock Exchange until the 1870s.
Even in the 1850s, when Cooper was in his sixties, he was looking for new worlds to conquer. In 1858 he helped found the New York, Newfoundland and London Telegraph Company, which, after many setbacks succeeded in laying the Atlantic ca.ble, a technological success that changed the world profoundly.
By this time Cooper was in the third phase of his life- that devoted to doing good works. He had always served on innumerable boards established to improve the quality of life in his city. Now he resolved to do something more concrete. He established Cooper Union in 1859 “for the advancement of science and art.” The building itself was interesting, being the first “fireproof” one erected in the country (using iron beams manufactured, of course, by Peter Cooper) and containing a shaft in anticipation of the invention of a practical elevator.
But it is the Union, not the building, that is really interesting, for in addition to advancing science and art, it existed for the advancement of those who wished to advance themselves. It offered free courses and lectures on numerous subjects in science and the arts, and it maintained a reading room that the general public was welcome to use. This the public did in vast numbers, often three thousand a week. To this day Cooper Union remains one of the rare private institutions of higher learning in the country that do not charge tuition.
Toward the end of his life, Peter Cooper remarked: “I have always recognized that the object of business is to make money in an honourable manner. I have endeavoured to remember that the object of life is to do good.”
I do not know if David Packard knew those words, but he, too, lived by them.